The missing keystone:
Why corporate reporting produces data without insight and what to do about it
by Kate Wolfenden
Corporate reporting: an industrial complex
Corporate reporting has become its own industry. According to PwC, the average listed corporation now spends £1.2-3.65 million annually to comply with ca. 15-20 voluntary and mandatory reporting mechanisms.
The premise is simple: transparency drives accountability, accountability drives better decisions, better decisions create value. Yet despite this logic, something in the chain isn’t working.
Despite mountains of sustainability reports, TCFD disclosures, and ESG data, boards consistently struggle to answer basic strategic questions: Why is this risk materialising now? What is amplifying it? and How could our response create unintended consequences elsewhere?
In short: We are drowning in information while starving for insight.
The snapshot problem
The tools corporations currently deploy to identify and manage risks all share a common flaw: they produce snapshots, not systems understanding.
Risk registers list threats in isolation with no map of how they interact, cascade, or amplify each other. Strategy researcher Kim Warren describes this as "seeing the stocks without understanding the flows" - knowing what you have without understanding the dynamics of how you got it or where it's headed.
Scenario planning collapses complex futures into 2-3 discrete pathways. These scenarios obscure rather than illuminate the causal mechanisms that will determine which future unfolds. They tell you what might happen, not why or how.
Materiality assessments identify what matters most - both impacts on the company and the company's impacts on the world. Yet even double materiality assessments typically treat these as separate categories to be managed independently. What they miss is the feedback loop: how a company's impacts on environmental and social systems reshapes the very resources, markets, and operating conditions the business depends on.
Why is this happening? Because these tools weren't designed to be integrated. They were designed to feed specific reporting requirements. And so they remain siloed, producing appendices in board packs rather than genuine strategic intelligence.
The result: Boards and executive leadership teams receive carefully prepared answers to questions that matter for compliance and process, but lack the analytical infrastructure to grapple with questions that matter for survival: How do our operations alter the systems we depend on? Where are the core dynamics that could amplify small changes into existential threats? What are the most pertinent leverage points that could enable us to transform the result.
A corporate systems map is not another reporting overlay. It is a fundamentally different tool - one that synthesises disparate data into a dynamic model of cause and effect.
Different purpose: Systems mapping takes the outputs of existing tools - e.g. stakeholder concerns, material issues, risk assessments and scenario variables - and asks: How do these factors actually interact to produce the outcomes we're seeing?
Different process: The process involves identifying the key dynamics in your value chain and wider system context (not just financial capital, but natural resources, social license, technical capabilities, market demand), mapping the causal links between them, revealing feedback loops, and locating leverage points where small interventions can produce disproportionate effects.
Different results: Think of it as the difference between a list of symptoms or a diagnosis. A register tells you "supply chain disruption" is a risk. The map shows you why. Perhaps your sourcing strategy created dependencies on regions where water scarcity is intensifying - scarcity that your own sector's extraction patterns are amplifying. As water stress degrades agricultural yields in these regions, commodity prices become more volatile, which triggers your procurement team to seek even cheaper sources in similarly water-stressed areas, further concentrating your exposure. You're not just vulnerable to the system - you're actively reinforcing the dynamic that's destabilising your supply chain. Once you see that structure, you can intervene - either in pursuit of risk management or harnessing the hidden opportunity.
The keystone solution: systems mapping in the corporate toolkit
The case for change
The business case for this shift is structural, not marginal.
Companies currently employ entire teams to feed data into stakeholder engagement surveys (ca. £300k-£1.2m/year), materiality assessments (ca. £310k-£850k), scenario planning exercises (£290k-£825k), and risk registers and reporting (ca. £310k-£800k/ year) - totaling ca. £1.2-3.65m per year on fragmented reporting that satisfies compliance but provides limited strategic value.
Meanwhile, McKinsey estimates that effective sustainability integration can affect 5-20% of EBITDA across industries and Bain & Company documents real-world cases where ESG-driven strategy added 3-5 percentage points to EBITDA - not through better reporting, but through better understanding of how social and environmental factors shape business performance.
These are realised gains from companies that moved beyond asking "what are our sustainability risks?" to asking "how do environmental and social dynamics actually shape our business system?"
This shift in practice is subtle, but impactful.
From current state: We draw the line at reporting.
A company that spends £1.2-3.65m per year producing fragmented reports that satisfy compliance but provide limited strategic value.
To future state: We choose to understand the why.
A company that invests an additional £100k-200k to synthesise that sustainability data into an integrated and enduring systems model that can:
Build more agile and resilient strategies by surfacing interdependencies and risks across the value chain and defining the most effective way to respond to them
Unlock agility and innovation by revealing opportunities for systemic intervention that isolated business units might never see
Elevate and accelerate decision quality by giving boards and their leadership teams a shared mental model of how the core dynamics of its industry and value chain works.
Enhance value chain and key stakeholder relationships through greater insight into difficult strategy development and possible trade off decisions
Provide richer and more coherent narratives to better inform and engage with investors on longer term transformative trajectories
If we just considered 5% of that potential McKinsey-identified EBITDA opportunity, and achieved only 5% improvement in performance as a result, our bet is that the ROI would be imminent and compounding.
Delivering on 103’s mission: Open sourcing the toolkit
103 is a specialist systems organisation working at the intersection of corporate strategy and systems change. Our mission is to become an open source toolbox to help organisations intervene in systems to create positive change.
To support that goal, we are open-sourcing our methodologies by the end of 2025.
The toolkit includes foundational systems research protocols, systems boundary development frameworks, stakeholder and systems mapping methodologies, plus step by step guides on how to deliver our programmes: Demand-Led Innovation, Systems Leadership, and Collective Intelligence Building.
If you'd like to be notified when these tools are released, please join our mailing list, below.
